Report: Even Fewer Rentals for the Vulnerable

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Affordable housing inventory is lacking nationwide, and rentals are no exception.

According to a recent report by Freddie Mac, affordable rentals are in short supply, and the situation is worsening. Analysts evaluated Freddie Mac Multifamily-financed loans from 2010 to 2016, finding that “affordable” rentals (defined as affordable to those earning 50 percent or less of a given area’s median income) have gone from an 11.2 percent share of all rentals to a 4.3 percent share—a loss of 60 percent.

“Our analysis looked at the affordability of the same rental units at two close but different points in time,” explains Steve Guggenmos, vice president of Multifamily Research and Modeling at Freddie Mac. “In a matter of just a few years, we found that a large number of units previously affordable to very-low income families could no longer be considered affordable.”

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Analysts also examined nine states where Freddie-financed loans were most prevalent, finding that the affordable rental share declined in seven states: Arizona, Colorado, Georgia, Nevada, North Carolina, Texas and Washington. In Colorado, the affordable rental share dropped from 32.4 percent to 7.5 percent; in North Carolina, 9.8 percent to 0.3 percent.

“This is a trend that is worsening, and Freddie Mac is working to better understand and develop offerings that meet the needs of this market,” Guggenmos says. “This report, and innovative offerings like our Targeted Affordable Housing and Small Balance Loan programs, are part of that effort.”